Customers affected by the issue would see a greyed-out speaker icon during phone calls, and the defect also prevented the person on the other end of the line from hearing an iPhone 7 user during regular phones calls or FaceTime chats. At the time, Apple's solution -- as per an internal support document -- was for an Apple Store Genius (or authorized Apple serve center) to run audio diagnostics on the device and if the device failed, a "warranty exception" was requested. This basically allowed the customer to have their device repaired for free -- even if it was out of warranty.
However, MacRumors is indicating that Apple reversed course on the free repair policy starting in July and continues to charge customers for what appears to be a design defect. In fact, the company went so far as to allegedly delete the internal document in reference to the repair campaign for the iPhone 7 microphone issue. What's even odder is that nugget from MacRumors.
"Since then, many Apple retail and support employees have refused to acknowledge the policy ever existed,” the publication writes. “Based on the number of users affected, it is almost certainly a hardware defect, so it's unclear why Apple is no longer offering free repairs and forcing customers to pay out of pocket for a fix."
Interestingly, Apple never identified what exactly caused iPhone 7 microphones to fail. In fact, it's reported that iPhone 7 microphones are still failing with the recently released iOS 12.1.1 update. However, a June report from Motherboard suggested that the problem is indeed on Apple's end, and relates to a failure of the logic board that has been dubbed "loop disease":
For the past six months, Cerva has been receiving large numbers of iPhone 7 and iPhone 7 Plus devices—often 10 to 15 per week—with a similar issue: one of the pads that connects the audio chip, which is located on the motherboard near the SIM card tray, has come loose.
The early symptoms are a grayed-out Voice Memos icon, a grayed-out “speaker” button during phone calls, or intermittent freezing. Eventually, the phone can get stuck on the Apple logo instead of powering on.
Unfortunately for customers that have been stricken with the microphone defect, the repair isn't cheap now that Apple has decided to stop giving gratis repairs, and fails to acknowledge that there was ever a problem. Service is performed as an "out-of-warranty" repair, meaning that customers have to fork over $300. Of course, if your phone is still under warranty or covered by AppleCare+, you're in the clear. But the majority of iPhone users out there have probably already exhausted their factory warranty.
Some users have taken Apple up on an offer for a refurbished replacement device at a cost of $329 to $349, but there's no guarantee that these devices won't suffer the same fate in the future (requiring another expensive repair).